Tyson Foods net income more than doubles in 2nd quarter of 2014
Sales, operating margins in four Tyson Foods business segments improve during second quarter
Tyson Foods’ net income during the second-quarter of 2014 more than doubled, with the company reaping benefits from a strong demand for chicken and higher prices for beef and pork. For the three-month period ending March 29, Tyson Foods earned $213 million, up substantially from the $95 million earned during the second quarter of 2013.
Tyson Foods, releasing its quarterly financial information on May 5, reported increased sales and improved operating margins in four of five business segments, with gains in its chicken, beef, pork and prepared foods segments. Beef and pork benefited from higher prices, despite a 1.8 percent decline in the volume of beef sold. Prices for the chicken and prepared segments decreased by less than a percent for the quarter, but the segments’ increases in sales volume more than offset the difference in prices.
"We had a record second quarter, which is a testament to our great team and our balanced multi-protein, multi-channel, multi-national business model," said Donnie Smith, Tyson Foods'president and CEO. "Our second quarter is usually our most challenging. We had a lot to overcome, including a harsher than normal winter, but I'm satisfied with the results. I'm still confident in my expectations for the year that we will achieve our goal of 6-8 percent sales growth in value-added products.
"We're pleased with the performance of our chicken segment as sales volume grew on strong demand. Our beef and pork segments did a great job of managing tight supplies and maintaining margins through record high input costs. In our prepared foods segment in the second quarter, we integrated recent acquisitions, invested in marketing and advertising and had several new successful product launches. While these efforts take time to bear fruit, we believe prepared foods presents one of the best opportunities for earnings growth in the future.”
Meanwhile, Tyson’s international business segment experienced decreased sales volume and operating margins, but Smith is confident in the long-term, that segment will be profitable.
"The international segment is another area where we think some short-term sacrifices are worth the long-term earnings potential. We've chosen to slow down our growth this year, primarily due to weak demand in China. We are committed to our China operations, and we believe we now have the right pace for developing that business as we wait for demand to return. We think it will get sequentially better from here, and we like the long-term opportunity," he said.